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How to Optimize for Conversions in Email Marketing

November 28, 2017

How to optimize for conversions in email marketing

Conversion rate: one of the top three KPIs (together with open rate and click-through rate), and undoubtedly a well-known term among most email marketers. When it comes to email marketing, optimizing for conversions is a priority – but how do we go about this? We take a look at some of the most important things to consider when it comes to conversion rate.

What is a conversion?

Conversions are often talked about in relation to ecommerce. The goal is to turn as many website (or shop) visitors into paying customers – i.e. to convince them to make a conversion. When considering an ecommerce website alone, conversion optimization is a case of making the online store as attractive and user-friendly as possible – in order to guide the user to the checkout.

When optimizing for conversions in email marketing, the process is somewhat longer. A potential customer receives a newsletter, opens it, clicks on a link which redirects them to the website, and then makes a purchase. In this case, conversion optimization is all about using the email to effectively direct the recipients to your online shop.

How is the conversion rate calculated?

The term “conversion” tends to refer to sales transactions in online shops. However, conversions can take many forms – be it the purchase of a product, booking of a service, participation in an event or the download of a document.

What’s more, the conversion rate may vary depending on the other KPIs it is being related to. In most cases, however, it is calculated as follows: (Conversions *100 / clicks).

When measuring the conversion rate of an email, it is best to look at the number of conversions in relation to the number of opens. Otherwise, the conversion rate may appear better than it actually is. This can then raise questions as to why sales figures are still low. In email marketing, you should therefore think about whether the conversion rate should be calculated based on:

  • Number of recipients,
  • Number of opens, OR
  • Number of clicks

This also shows that, whilst the conversion rate can be a good indicator of success, it should never be considered in isolation. For example, if you calculate the conversion rate by (conversions * 100 / opens), you may get a relatively low metric even for a very successful newsletter. Consider the following two examples:

a) A newsletter is opened by 5000 recipients and achieves 500 conversions, giving it a conversion rate of 10%.

b) A newsletter is opened by 10,000 recipients and achieves 800 conversions, giving it a conversion rate of 8%.

Example A has the higher conversion rate, but Example B is likely to generate significantly more sales.

How and where do conversions take place?

As a rule, email marketing is seen as the final step in the conversion journey. A user is interested in a brand or product, subscribes to the newsletter, receives and opens an email, clicks on a link and, finally, buys something from the online store.

However, email marketing may also feature right at the beginning of the conversion process. Just because a recipient sees a product in an email for the first time does not necessarily mean they will buy it immediately. The newsletter may initially draw their attention to the product, which the user then goes back to buy at a later date. In this sense, the email triggers the conversion process rather than finalizing it.

So, click and conversion tracking alone may not be enough. By adding tracking parameters to newsletter links, you can follow the buyer’s path much more closely. You can see which products a user looked at, and how they came to find these products in the first place. In other words, you can identify the point at which email marketing came into play – was it the first point of contact, or the final touchpoint before the purchase?

email segmentation

So, there are many different paths that may lead to a conversion – and it’s not always a smooth, continuous journey. A potential customer may see a product in a newsletter but decide not to buy it. Weeks later, they might see the product again somewhere else. A month later, the user’s situation may have changed, leading them to decide to buy the product after all. To make the purchase, they search for the product via a search engine. In this case, email marketing has certainly contributed to the conversion, but was only one touchpoint in the whole process.

What factors can influence the email conversion rate?

In email marketing, conversions can be influenced by both internal and external factors. Internal factors include your own actions and decisions, such as: the offers or service that you provide, the design of your website and your marketing activities. To some extent, these can be controlled.

External factors are much harder to control, and can be very diverse – be it the consumer’s budget at a certain moment in time, or their current mood or purchasing preferences. It is almost impossible to influence such factors – but you can be sure to adapt your email marketing strategy to your different target groups as closely as possible. Through newsletter tracking and multivariate clustering, you can see which audience segments responded well to a particular newsletter as well as those who didn’t seem to engage. This gives you the opportunity to improve and optimize your email marketing for conversions.

Another external factor is the company’s own business model. Your conversion rate and sales figures may vary greatly depending on whether you sell a one-off product or a subscription-based service. The type of industry you operate in will also make a difference. Inexpensive consumer products (e.g. socks) will be bought much more often than expensive, made-to-measure suits. At the same time, it’s important to take the competitive landscape, economic climate and any seasonal changes into account.

Conversions are also directly related to the user-friendliness of a website. The less friction points, the better – so the user should be able to get from the newsletter to their desired product in your online shop as effortlessly as possible.

Conversion optimization is not only an issue for ecommerce owners – it is also a crucial part of email marketing. Want more strategies for optimizing your email campaigns? Learn how personalization can help to boost your email conversion rate.

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